- Spokesman warns carriers reeling from blows to air travel brought on by health crisis, and urgent financial aid is needed
- A staggering 146,000 industry jobs locally could be at risk this year
Hong Kong's aviation sector is projected to be the worst hit in Asia, with the coronavirus pandemic expected to cut passenger numbers by 23.6 million and place 146,000 jobs in the industry at risk this year, a global airline association has estimated.
In new figures released, the International Air Transport Association (IATA) forecast air travel demand for Hong Kong to collapse by 46 per cent in 2020 year on year, and a financial review concluded it faced a US$6 billion (HK$46.5 billion) loss in revenue.
The travel and tourism sector suffered further blows on Monday with a ban on transit stopovers and non-residents extended indefinitely.
For the publicly listed Cathay Pacific Group, which controls three of the city's four airlines, passenger revenue last year amounted to HK$74 billion. HNA-backed Hong Kong Airlines is privately held and does not disclose its financial performance. All of the city's carriers face financial hardship.
One of the largest air travel markets, China, first hit by the coronavirus outbreak " which led to a near-wipeout of all flights for the country for a brief period earlier this year before a gradual rebound " would shrink 37 per cent this year, according to IATA.
Hong Kong extends ban on non-residents indefinitely as cases rise to 914
It said the mainland China market faced a US$40 billion revenue decline and a contraction of 264 million travellers in a market the size of about 700 million. A US$252 billion revenue hit to airlines globally was also estimated.
"The Asia-Pacific region as a whole will see passenger demand reduced by 37 per cent this year. Airlines are expected to incur a revenue loss of US$88 billion. Airlines are fighting for their survival, and financial relief is urgently needed to sustain them through this volatile situation," an IATA spokesman said.
For demand in other major markets, Australia may record a decline of 39 per cent, Singapore by 37 per cent, Japan by 38 per cent and South Korea by 40 per cent.
IATA said globally 25 million jobs in the wider economy that supported aviation were at risk in the current climate.
The calculated financial impact was based on global travel restrictions being lifted after three months.
At least 2.35 million jobs in mainland China and 146,000 jobs in Hong Kong that support the aviation sector were vulnerable from the pandemic.
The effect on Hong Kong in terms of air travel numbers would push it below 50 million passengers for the first time since 2009, during the global financial crisis. Some 71.5 million people flew in a protest-hit 2019.
Outlining the trouble for Hong Kong's aviation sector, the number of people departing the city in March via the airport fell to a 45-year low, according to Immigration Department data. The figure of 128,184 was the lowest since June 1974 when it reached 121,326 exits. The arrivals of 263,268 last month was the lowest since May 2003.
Hong Kong's air passenger numbers bottom out amid Covid-19 pandemic
According to IATA estimates, the aviation sector in Hong Kong supports 330,000 jobs and contributes 10.2 per cent to the city's gross domestic product.
Some 2,000 of 24,000 service jobs at Hong Kong International Airport (HKIA) were cut since the virus took hold and a further 2,000 could follow due to a lack of government help.
Hong Kong Airlines cut 400 jobs, and its remaining 2,900 staff had absorbed steep pay cuts. Most of the 32,000 employees at the Cathay Pacific Group took three weeks of unpaid leave.
Wilson Kwong Wing-Tsuen, chief of one of the world's largest cargo terminal operators, said protecting skilled labour was key to shielding HKIA as a premier airport hub.
"It is important we safeguard the skilled labour pool at the airport," the CEO of Hong Kong Air Cargo Terminal Limited said. "If we rebound, if we don't have that capacity of human capital, it is very difficult to catch up again (to our previous position)."
Luya You, transport analyst at brokerage Bocom International, forecast a "conservative" HK$50 billion loss in revenue.
"The government could extend more aid to boost cargo operations, which would help more than just the aviation industry. But presently the amount of aid offered specifically to airlines pales in comparison to monthly cash burn, especially in quarter two (of 2020)," she said.
Hong Kong has rolled out HK$2.6 billion in financial relief to the aviation industry so far, but the industry has criticised the help as too little.
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